The high-flying Australian dollar is seen pulling back slightly in coming months, but is still forecast to stay above parity as lofty domestic rates and a robust economy attract yield-hungry investors.
Around 40 analysts polled forecast the Australian dollar at $1.080, before gradually slipping to $1.023 in 12 months. Following its meteoric rise to a 29-year peak of $1.1081 last week, analysts warned the Aussie is vulnerable to a modest correction.
Australia's central bank left its 4.75 percent cash rate unchanged this week, for the ninth straight month, citing ongoing global uncertainty. Indeed, recent downward revisions to US economic growth suggests the world economy has less momentum than previously thought. This added to an already shaky outlook from Europe fighting a massive debt crisis.
Still, the RBA statement showed the central bank considered hiking due to domestic inflation concerns, leaving the door open for a rate hike in coming months. Asia's voracious appetite for the nation's abundant natural resources has set off an unprecedented mining boom that the RBA expects will help the economy grow at a healthy 4 percent rate next year.
Similarly, the New Zealand dollar is seen likely to retreat from this week's fresh 30-year peak of NZ$0.8842 over the next 12 months.